Asian stocks edge up on rate cut hopes, euro stumbles

Asian stocks inched higher Monday as investors grew more confident about a potential US interest rate cut in September. This optimism comes despite political uncertainty in Europe following France’s hung parliament election results.

The euro dipped slightly against the dollar to $1.0828, after reaching a high of $1.0843 on Friday.

Equities were supported by growing expectations for a US Federal Reserve policy easing. The MSCI broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent, while Japan’s Nikkei gained 0.2 per cent.

However, Chinese blue chips fell 0.4 per cent as the central bank launched new money market operations. US stock futures were down slightly ahead of earnings season kick-off later this week.

Friday’s soft US jobs report strengthened the case for a September rate cut, with futures now implying a 77 per cent chance of a decrease.

The report showed a sharp decline in three-month payroll growth, leading analysts to expect the Fed to cut rates by 53 basis points this year.

Federal Reserve Chair Jerome Powell will share his economic outlook in congressional testimony this week, alongside other Fed officials.

Investors will closely monitor these speeches. The highlight will be Thursday’s US consumer price report, with expectations of a slight easing in inflation.

In commodity markets, gold held near one-month highs at $2,385 an ounce, while oil prices slipped as the market awaited news on the potential impact of Hurricane Beryl on Gulf of Mexico supplies.

Attribution: Reuters

Leave a comment